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The DJIA lost 666 points on Friday, 2/2/18. What an ominous number. I don’t like it. Never had, never
will. Wouldn’t ever play the 6’s. Only 666 I’m familiar with nowadays is the Park Avenue address owned
by presidential adviser and son-in-law Jared Kushner with over $1 billion in debt outstanding.
So it goes without saying that I believed Monday was going to be a humdinger. I like to write my column
on Monday morning after reading the WSJ and other business publications over the weekend.
But this Monday, I paused because upon waking I discovered that overseas stock markets had already
tanked Sunday night.
So Bloomberg Television and CNBC I go, and lo and behold here comes a 1100 + point decline blood
bath. Now, no one predicted last week’s market drop or Monday’s carnage, and if someone says they
did, they’re lying. Ninety-nine percent of the experts never see it coming. But what does it mean and
what happens next?
Well, I’m going to sit my option trader, stock investor ass down for a few days because I didn’t see it
either. My Walmart (WMT) options, (109 calls 2/9/18) are worthless right now, and I can kiss the
steelmaker options (AKS) goodbye as well. It’s like when Rodin and Godzilla fight, get out of the way
until the dust settles.
And generally what happens is these occasions is that all the big boys , who didn’t see it coming either,
will step in and try to “ stabilize” the market, giving them time to figure out their next moves. Why?
Because four (4) trillion dollars’ worth of equity disappearing or changing hands ain’t no small matter.
That’s a chunk of change and the big boys will be wanting to get some of that back. Then once they
“stabilize” and build their chips back, they will take their profits and leave the little guy holding the bag.
Remember, last week when I mentioned how the small investors came back into the market in a big way
in December and January is a contrary sign, exhibit #1, the weak dollar, exhibit #2, Trump bragging #3.
However, there are some things to consider before you head to the hills, or go the mattresses. If it
stabilizes there will definitely be some bargains available for trading opportunities and long-term results.
Even I might try WMT again because with me it was an earning play. Earnings report, 2/20/18, and the
stock and options were on the move until 666 showed up. Other stocks, you look, you choose, were also
making pretty good moves, have been beaten down and will probably lead the charge back up. If we
stabilize.
You have to choose being a trader or investor and let that drive your decision.
But what if it doesn’t “stabilize”. What if it cools off, then gets hot, and shortly thereafter goes
downward again in a hurry. It’s possible, but not too likely in the short term because bull markets
generally end with a whimper and not a bang. Might just be a pullback, down up to 9 percent, a
correction, down 10-19 percent, or the beginning of a bear market, one that falls 20 percent or more.
So, keep your powder dry, stash some cash. Look for stocks that went up, or not down as much during
the current turmoil. Be ready, get ready, one way or the other, because after all is said and down, the
stock market is not going you disappear.
The Poor Working Man: And just think, some commentators, analyst and pundits, remarked that
Friday’s unemployment report number, 4.1 percent unemployment, 200,000 new jobs created in
January is causing market worry. But the kicker to all these folks was the 2.9 percent rise in hourly
wages. Man, the money people sure don’t want folks to have jobs and an increase in wages unless it’s
one time bonuses, not a rise in the standard of living. What a country.
Stay tuned.
EARNING REPORTS THIS WEEK:
Monday: Bristol-Myers-Squibb; Sysco; Hess
Tuesday; General Motors; Disney
Wednesday: Prudential Financial; Tesla; Twenty-Century Fox
Thursday: AIG; Phillip-Morris international
Friday: Moody’s; P, G& E.
ECONOMIC REPORTS:
Wed: Consumer Credit, Crude Oil, Gasoline
Thursday: Initial Jobless Claims
Friday; short Sellers Report

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